A war of words erupted between MPs on a House of Commons committee and the board of Kraft during the investigation into the takeover of the Birmingham-based chocolate maker. Political Editor Jonathan Walker reports.

Cadbury owners Kraft took part in a furious behind-the-scenes row with MPs conducting an inquiry into the way the chocolate-maker was managed, it has emerged.

The US food giant launched a bitter attack on Black Country MP Adrian Bailey (Lab West Bromwich West), chairman of a senior Commons committee, after he demanded to speak to Kraft’s chief executive.

It accused him of looking for a “star witness” to publicly humiliate and claimed MPs had made “ill-founded allegations” against Kraft in the past.

The row was played out in a series of letters between Mr Bailey and Kraft managers, which have now been obtained by the Birmingham Post.

The letters show how the fall-out escalated from polite requests to extraordinary ill tempered accusations.

Mr Bailey chairs the House of Commons Business, Innovation and Skills Committee, which was conducting an inquiry into Kraft’s management of Cadbury since taking over the firm last January.

Other members include Margot James (Con Stourbridge) and Nadhim Zahawi (Con Stratford-on-Avon).

In two letters written on behalf of the Committee, Mr Bailey asked Kraft CEO Irene Rosenfeld to attend hearings in Westminster and answer questions.

When she turned the request down, he wrote a third time to suggest she could give evidence by video-link, so that she would not need to leave the United States.

But in response, Kraft sent a reply from Marc Firestone, the firm’s Executive Vice President for Corporate and Legal Affairs and General Counsel, telling the committee in no uncertain terms that Ms Rosenfeld was not interested in speaking to them.

He also complained about the treatment he had received when he gave evidence to the Committee in a previous hearing last year.

The letter said: “Based on the experience of last year’s hearing and recent comments by some Committee members, there seems to be a desire to have a ‘star witness’ towards whom ill-founded allegations and insults can be made, with little or no attempt to discuss the facts and look rationally into the evidence.

“Indeed, a review of the transcript from last year’s hearing shows that it went far beyond spirited debate to a remarkable level of rancour.”

Mr Bailey complained in an earlier letter that chief executives frequently gave evidence to Congressional committee hearings in the United States, even if they were not based in America.

But Mr Firestone appeared to take offence at the comparison, saying in his reply: “As you will know, however, these hearings have typically involved environmental disasters, massive accounting frauds, and deadly product liability scandals, rather than, as in this case, an acquisition that ultimately received the Cadbury Board’s unanimous recommendation and that, as our report shows, has already delivered many positive outcomes.

“Kraft Foods has the greatest respect for the House of Commons and will continue to cooperate fully in providing relevant information to the Committee. Far from ‘snubbing’ the Committee, Ms Rosenfeld has carefully chosen the senior executives she knows to be best qualified to testify about Kraft Foods.”

MPs eventually had to admit defeat and make do with evidence from Mr Firestone, along with Trevor Bond, President of Kraft Foods Europe, and Nick Bunker, President of Kraft Food UK and Ireland, who appeared before the committee in March.

The letters have now been published, alongside a report in which the Committee warns it still has “significant concerns” about Kraft’s takeover of Cadbury. They criticised Kraft for moving senior marketing roles to Zurich, Switzerland, saying it called into question the firm’s commitment to respecting Cadbury’s British heritage.

And they said Ms Rosenfeld’s refusal to speak to the Committee “demonstrates a regrettably dismissive attitude to a National Parliament.”

Speaking to the Birmingham Post, Mr Bailey said the committee would not hesitate to request Ms Rosenfeld’s presence again if it conducted future inquiries into Kraft and Cadbury. He said: “She should really sack her PR people, because this was a golden opportunity for her to come and on a national stage deliver a very positive message about Kraft and its intentions, and the way it has managed Cadbury over the past year.”

>> Next page: Extracts from the letters between Kraft and the Business, Innovation and Skills Committee

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Extracts from the letters between Kraft and Commons Business, Innovation and Skills Committee chairman Adrian Bailey

* December 16 2010
Letter to Irene Rosenfeld, Chief Operating Officer and Chairman, Kraft Foods Inc.
from the Chair of the Committee

I understand that you were invited to represent Kraft at the last inquiry, but declined to do so. I would like to avoid such an outcome for this inquiry. I am therefore writing now to invite you to give evidence. The time and date of the meeting has yet to be decided. I would prefer it to take place in the early part of next year but we will be flexible in order to accommodate you.

It would be helpful if you could inform me of any dates which you would be able to attend or any dates which would coincide with you visiting the United Kingdom in the course of your work.

* January 10 2011
Letter to the Chair of the Committee
from Marc Firestone, Kraft

Ms Rosenfeld will ensure that the most appropriate people from Kraft Foods are available to supply the information you have requested. In that regard, because I gave the undertakings in March and report directly to Ms Rosenfeld as a member of Kraft Foods’ executive team, she has asked that I lead the team that will be available to appear before the Committee.

The team will include senior executives from Kraft Foods Europe and from Kraft Foods UK and Ireland. Ms Rosenfeld believes that this team combines the seniority and knowledge needed to answer questions authoritatively and to the level of detail that will be most helpful to the Committee’s deliberations.

January 24 2011
Letter to Rosenfeld
from the Chair of the Committee

I had hoped that you would have seen this as an opportunity to demonstrate, in person, your company’s commitment to Cadbury and to its heritage. Therefore, you will not be surprised to read that I am extremely disappointed that you felt unable to accept my invitation.

As you know, the takeover of Cadbury by Kraft was badly received in the United Kingdom and there was a high degree of scepticism over the motive for the takeover, the way in which it was conducted and Kraft’s future strategy of the company. That scepticism remains and your refusal to attend a Committee of the House of Commons will do nothing to change that position.

January 28 2010
Letter to the Chair of the Committee
from Rosenfeld

As you know, we have proposed a team of key senior executives from across Kraft Foods, led by Marc, who is our EVP, Corporate & Legal Affairs and General Counsel. I believe it is essential that the individuals closest to the market and to our business plans be the appropriate representatives before the Committee.

This team brings together the seniority and knowledge that we believe will be most helpful to the Committee in looking into the matters under consideration.

February 3 2011
Letter to Rosenfeld
from the Chair of the Committee

My Committee considered your letter dated 28 January at its meeting on Tuesday. It was profoundly disappointed with your response and your lack of willingness to accept our invitation for you to give evidence in person.

I appreciate that busy schedules can often be barriers to holding such meetings and this may be why you do not feel able to appear. Committees of the House of Commons have the facility to hold hearings via video link. Although this is not ideal, it does offer a solution to problems over availability for witnesses from overseas.

I would be happy to offer this as a compromise should your diary commitments not allow you to come to Parliament in person.

February 9 2011
Letter to the Chair of the Committee
from Marc Firestone, Kraft

Given our understanding that the Committee’s purpose is to enquire into relevant facts, the repeated demands for Ms Rosenfeld to appear in person are regrettable.

Based on the experience of last year’s hearing and recent comments by some Committee members, there seems to be a desire to have a “star witness” towards whom ill-founded allegations and insults can be made, with little or no attempt to discuss the facts and look rationally into the evidence. Indeed, a review of the transcript from last year’s hearing shows that it went far beyond spirited debate to a remarkable level of rancor.

Your letter refers to instances in which corporate leaders have testified before the US Congress. As you will know, however, these hearings have typically involved environmental disasters, massive accounting frauds, and deadly product liability scandals, rather than, as in this case, an acquisition that ultimately received the Cadbury Board’s unanimous recommendation and that, as our report shows, has already delivered many positive outcomes.

Kraft Foods has the greatest respect for the House of Commons and will continue to cooperate fully in providing relevant information to the Committee. Far from “snubbing” the Committee, Ms Rosenfeld has carefully chosen the senior executives she knows to be best qualified to testify about Kraft Foods.